Delivering Growth through Technology. 3D Visualization Room, E&P Division

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1 Delivering Growth through Technology 3D Visualization Room, E&P Division June 2006

2 Disclaimer This presentation contains forward-looking statements regarding future events and the future results of Eni that are based on current expectations, estimates, forecasts, and projections about the industries in which Eni operates and the beliefs and assumptions of the management of Eni. In particular, among other statements, certain statements with regard to management objectives, trends in results of operations, margins, costs, return on equity, risk management and competition are forward-looking in nature. Words such as expects, anticipates, targets, goals, projects, intends, plans, believes, seeks, estimates, variations of such words, and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict because they relate to events and depend on circumstances that will occur in the future. Therefore, Eni s actual results may differ materially and adversely from those expressed or implied in any forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, economic conditions globally, the impact of competition, political and economic developments in the countries in which Eni operates, regulatory developments in Italy and internationally and changes in oil prices and in the margins for Eni products. Any forward-looking statements made by or on behalf of Eni speak only as of the date they are made. Eni does not undertake to update forward-looking statements to reflect any changes in Eni s expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. The reader should, however, consult any further disclosures Eni may make in documents it files with the US Securities and Exchange Commission. 2

3 Agenda Technology in Eni P. Scaroni Upstream technology G. Giannone Midstream technology L. Patron 3

4 Strategy Operational efficiency E&P: grow oil and gas production and replace reserves G&P: grow internationally and preserve Italian gas business R&M: upgrade refining capacity and strengthen competitive position in marketing Technology 4

5 Growth Targets to 2009 E&P Organic production growth (CAGR 06-09) 4% LNG sales (bcm) 13 Reserve replacement >100% Estimate CAGR ~3% 2012 estimate >20 G&P Gas sales in Europe (bcm) >100 Robust free cash flow ( bn) estimate >110 R&M Refinery throughput growth (MTon) >42 Conversion index 60% Improve integration with upstream 5

6 Eni Business Challenges: technology can help Upstream CHALLENGES Managing depletion Expanding in frontier areas Increasing role of NOCs Increasing sulphur content HOW TECHNOLOGY HELPS Increase recovery rates Adapt to extreme conditions Be a key technology provider Treat and dispose sulphur and H 2 S Midstream Monetizing non conventional resources and remote hydrocarbons Upgrade heavy oil and tar sands Value gas through conversion to distillates (GTL) and long-haul gas transmission Downstream Stringent environmental regulations Reduce pollution and emissions Improve products quality Technology is a key driver for our growth 6

Getting the most from Technology TECHNOLOGY STRATEGY Distinctive proprietary technology development Integrated approach, business driven

7 Getting the most from Technology TECHNOLOGY STRATEGY Distinctive proprietary technology development Integrated approach, business driven Technology partnership with oil producing countries Optimize organization Increase spending Focus on key projects Leverage on in-house know how 7

8 Optimize Organization Yesterday Today CEO CEO Technology Strategy Technology E&P G&P R&M Research E&P G&P R&M Upstream Research Downstream Research Research separated from business Corporate technology function in charge of long-term technology pipeline Research integrated with business Business in charge of technology pipeline Tighter link with strategies Bringing technology to our businesses 8

9 Increase Spending Million 874 ~20% 1,045 EXPENDITURE BY ACTIVITY 22% 18% 60% Business Innovation Development Projects Research Programs EXPENDITURE BY BUSINESS 3% 12% 54% % Upstream Downstream Oil Downstream Gas Others (incl. E&OS) Spending more and more effectively in technology 9

10 Focus on Key Technological Projects Upstream Advanced seismic and drilling technologies Sulphur/H 2 S processing, disposal and storage Midstream EST: heavy oil and tar sands upgrading TAP: Gas High Pressure Transmission GTL: Gas to liquids Downstream Clean fuels and high quality products Hydrogen production Giving priority to key projects in our technology portfolio 10

11 Upstream Technology Gino Giannone Senior Vice President Development

12 Innovative Technology Application to maximize E&P Portfolio Quality CASING DRIVE SYSTEM (CDS) Italy Monte Enoc BIOMONITORING Italy - Trecate FLOW ASSURANCE Italy Trecate, Val D agri GOM- Roxanne SEISMIC IMAGING Egypt Mellehia Kazakhstan - Kashagan MULTIPHASE PUMPING Tunisia Hammouda Algeria ROM INTELLIGENT COMPLETION NON INTRUSIVE PIPELINE INSPECTION Equador-Villano-Baeza GEOCHEMICAL METHODS FOR PRODUCTION ALLOCATION Egypt Port Fouad Egypt - Belayim CONTINUOUS CIRCULATION SYSTEM (CCS) Tunisia - Hawa EXPANDABLE CASING Egypt Ashrafi Congo Loango, Zatchi 12

of the subsurface It reduces uncertainties in both the Exploration and Development phases It allows to

13 Seismic Imaging: 3D CRS (Common Reflection Surface) Stack INDUSTRY Proprietary Technology ENI CRS TECHNOLOGY Innovative approach to Seismic Imaging which produces a greatly enhanced 3- dimensional image of the subsurface It reduces uncertainties in both the Exploration and Development phases It allows to pursue new exploration plays in areas of poor/lacking seismic response - e.g Kashagan, Italy, Elephant (Lybia) 13

14 Seismic Imaging: 3D CRS (Common Reflection Surface) Stack Example: Libyan application CONVENTIONAL 3D CRS 14

to face difficult down-hole environments Access to new targets not

Egypt: Port Fouad) Drilling time and cost reduction Safety and

15 Eni s Drilling Advanced Technologies Extreme Lean Profile Proprietary Technology E-CD (Eni Circulation device) Technologies to face difficult down-hole environments Access to new targets not achievable with the conventional techniques (e.g. Egypt: Port Fouad) Drilling time and cost reduction Safety and environmental improvement Worldwide extensive applications Aluminum Drill Pipe Ceramic Coated 15

16 Geosteering Technologies Joint R&D efforts with Shell E&P Drilling technologies to develop look ahead of bit capabilities. Better positioning of the well trajectory in the reservoir and improved management of exploration wells Prototype to be tested Q

Sulphur and H 2 S Management in E&P Operations

quantities of hydrogen sulfide from highly sour

Condensates) Low-cost, environmentallyfriendly

(Sulphur Box confinement technology) Sulphur

17 Sulphur and H 2 S Management in E&P Operations Proprietary Technology Bulk removal of large quantities of hydrogen sulfide from highly sour gas streams (Hydrogen Sulphide Absorption by Condensates) Low-cost, environmentallyfriendly technologies for sulphur storage. (Sulphur Box confinement technology) Sulphur re-injection technologies for permanent disposal (Sulphur slurry injection) 17

18 Zero Emission Well Testing Proprietary Technology Production Well testing technology able to avoid surface flow hydrocarbon Strong reduction of environmental impact Possibility to operate in areas with very restrictive regulations (e.g. Kashagan, Norway) 18

19 Midstream technology Luigi Patron Senior Technology Advisor

20 Gas to Liquids Oxygen Nat. Gas Syngas Production Syngas Fischer- Tropsch Synthesis Waxes Upgrading Final products Implementing the technology portfolio to monetize stranded gas Test campaigns successfully completed on Pilot Plant at Eni s Sannazzaro Refinery Basic Process Design for a 36,000 bpd industrial plant completed in

21 Gas to Markets High Pressure Transmission Natural gas transportation by HIGH PRESSURE PIPELINES TECHNOLOGY main features: Large capacity > 10 Bcm/y Long distance > 3,000 km High grade steel Development based on proven in house experience TARGETS Reduce investment costs Reduce operating costs Extend breakeven distance of transportation pipeline up to 5,000 km 21

High Pressure Transmission Pilot Infrastructure High grade steel pilot infrastructure: instruments monitoring high pressure working operations Stress profiles equivalent to 30 years of commercial

22 High Pressure Transmission Pilot Infrastructure High grade steel pilot infrastructure: instruments monitoring high pressure working operations Stress profiles equivalent to 30 years of commercial operations are currently put on Full Scale Test Station, Sardinia (Italy) Proprietary Technology Line A Line Line B At the end of the testing period (2 nd half 2007): Line A* will be submitted to the explosion test Line B* will be inspected for metallurgical controls * Now buried 22

23 Worldwide Fuel Oil Production Fuel Oil Production in M tpa 45 USA Canada 100 Western Europe Africa 9 Eastern Europe 84 Russia Middle East South Asia & Pacific East Asia Japan Latin America Worldwide Fuel Oil Production amount to 583 Mtpa or 9.6 Mb/d 23

24 Heavy and non-conventional Oil Recoverable Reserves Billion barrels Canada Russia Venezuela 47* 575 Middle East Recoverable In Place Extra-heavy oil and tar sands presently recoverable reserves exceed the proven conventional ones in Middle East (*) Not considering 212 Billion barrels of bitumen in place located in small depots in remote areas Source: EIA- Annual Energy Outlook, February 2006; Alberta Energy & Utilities Board, June 2004; US Geological Survey, August

25 Non-conventional Oils: long term high potential crude reserves Industry Priorities Reduce breakeven production cost Environmental sustainable approach Technology is key to fully exploit opportunities in non-conventional oils 25

26 EST (Eni Slurry Technology) A cost effective technology to fully convert heavy oils, tar sand bitumen and petroleum residues into distillates High Flexibility to Feed Stock High quality products Total conversion to distillates No coke, no fuel oil production 26

EST (Eni Slurry Technology): process scheme Catalyst Make-up Vacuum Residue U.S.PATENT 5932090 Proprietary Technology Hydrogen Slurry Reactor High High rate rate slurry reactor with closed loop

27 EST (Eni Slurry Technology): process scheme Catalyst Make-up Vacuum Residue U.S.PATENT Proprietary Technology Hydrogen Slurry Reactor High High rate rate slurry reactor with closed loop reactor catalyst with recycling closed loop catalyst recycling Full residue conversion through closed loop Full asphaltene residue recycling conversion through closed loop asphaltene recycling Asphaltene / Catalyst Recycle F R A C T I O N A T O R S.D.A. Purge GAS + LPG+ H 2 S Naphtha Gasoil VGO DAO Conv. Unit Feed Bottom of the fractionator fractionator deasphalted oil (DAO) deasphalted to conversion oil unit(dao) to conversion unit No coke, no fuel oil production 27

28 EST (Eni Slurry Technology): main features High Flexibility to Feedstock Out of Ural, Middle East and Orinoco Belt heavy oils, as well as Canadian bitumen, have been successfully tested on Pilot Plant No coke production Conversion yield goes over 100% easily Problematic coke disposal is worked out Crude Oil 100 bbl Flexibility to product slate Diesel vs. gasoline can be adjusted EST Ebullated Bed Coking High quality middle distillates Low sulphur and aromatic content 107 bbl 87 bbl 87 bbl + Fuel Oil 15 bbl Coke 14 wt% + 28

Eni Slurry Technology (EST): development phase MILESTONES 2000-2002 Construction and running of a pilot plant 2Q 2003 Construction

29 Eni Slurry Technology (EST): development phase MILESTONES Construction and running of a pilot plant 2Q 2003 Construction start up of Commercial Demostration Plant (CDP) in Eni Taranto refinery (Italy) 3Q 2005 CDP Completion SDA Section Fractionator Reactor 29

30 EST Taranto Commercial Demonstration Plant Production capacity: 1,200bpd Successful start up: November Q2006: Achievement of the success criteria on URAL vacuum residue Testing: ATHABASCA bitumen 30

31 EST I st Industrial Application Eni s Sannazzaro (Italy) Refinery has been selected to host the first industrial application Reactors of the maximum size will be installed FEED completion and beginning of plant construction are expected within the 2 nd half of next year 31

Bitumen Upgrader Residue Conversion to Incremental Synthetic Fuels Products

Bitumen Upgrader Residue Conversion to Incremental Synthetic Fuels Products Technical Paper Expander Energy Inc. Jan Wagner, P.Eng. Steve Kresnyak, P.Eng. Final Issue June 19, 2013 Introduction During